Making Financial Services Accessible, Affordable and Appropriate
Lack of access to basic and affordable financial services is a daily reality for 2.7 billion of the world’s poor. Shut out of formal banking services, they are forced to manage their money in ways that make them more vulnerable to financial shocks and disasters.
Grameen Foundation partners with financial institutions, telecom operators and other businesses to create financial products and services for the poor and poorest. These products and services improve the lives and livelihoods of the poor by reducing the risk of financial disasters, improving financial security, and increasing and evening out income.
Expanding MFI Services while Decreasing Operating Costs
One example involves Grameen Foundation’s work with KEEF, a microfinance institution (MFI) in Kenya. Our solution enables KEEF to disperse loans to borrowers electronically, with borrowers “receiving” the loans on their mobile phones. Borrowers are then able to make loan payments with their phone. They also can easily and safely save money, purchase goods, and send and receive money transfers.
Integrating mobile phone functionality into an MFI’s processes lowers operating costs and makes it easier to service rural areas with more affordable loan products.
A study on M-PESA, a mobile phone service in Kenya that enables people to electronically send money via a mobile phone, found that poor users’ incomes increased 5 to 30% because they didn’t have to pay someone to deliver money or travel long distances themselves to make the delivery.
To learn more, you can read our Financial Literacy Pilot Report
where we examined if and how mobile phones can improve financial literacy amongst the poor. The study details the findings from our pilot performed in Uganda from March through December 2010.